How to Avoid Zombie Innovation Projects

The Link Between Innovation Strategy and Business Strategy

It is crucial for an innovation strategy to be an extension of an organization’s underlying business strategy. This connection ensures that innovation efforts are not just creative experiments but targeted projects that address key business challenges and opportunities. For example, if a company's business strategy focuses on customer centricity, its innovation strategy should prioritize projects that enhance customer experience and meet changing customer needs.

What are Zombie Innovation Projects?

Of course every innovator goes out with the intention of creating something useful, and in the context of intrapreneurship – something that will be of value to their organization. However, without an alignment between innovation and business strategy, innovation teams or individual innovators might pursue projects which are trendy, but unoriginal. These zombie projects; despite failing to support the broader business goals, continue to hang around, sucking up resources without a prospect of delivering real value for the organization.

Often, the reason for these projects continuously hanging around is due to a sunk-cost bias being present. This is the tendency to continue with projects into which time, resources and efforts have been invested into, even if the benefits of the project outweigh the costs.

The Problems of Misalignment

When there is misalignment between an organization’s overall business strategy and its innovation activities, a company is subjected to a number of risks. These include but are not limited to:

1. Resource Drain: Resources are allocated to projects that don't contribute to the company's strategic objectives.
2. Employee Disillusionment: Teams who are working on projects where it is unclear how these relate to the business, can cause employees to become less engaged and demotivated.
3. Strategic Drift: The organization can lose focus of its core goals, leading to a fragmented strategic direction.

These issues underline the importance of a robust framework that ensures innovation initiatives are purposeful and aligned with business objectives.

Best Practices for Innovation and Business Strategy Alignment

To avoid the rise of zombie projects in an organization, there are certain best practices that help to integrate innovation and business strategies seamlessly. It's important to implement these both on a structural and on a cultural level.

To align innovation strategies with business strategies, it's necessary to:

1. Outline Clear Innovation Objectives

Start by clearly defining what innovation means for your organization and how it supports the overall business strategy. This involves setting SMART (specific, measurable, attainable, relevant and time-bound) goals, and areas of innovation focus that align with business priorities.

2. Engage Leadership

Make sure that leaders are actively involved in the innovation process. This top-down involvement helps prioritize projects that align with strategic goals and secure the necessary resources for such projects.

3. Create an Innovation Pipeline

Develop a plan for managing innovation projects from ideation to execution. Evaluate and prioritize ideas based on their strategic fit and potential impact for your organization. To filter out ideas and retire zombie projects early on, it is helpful to implement clear gates in the process.

4. Use Data and Insights

Data insights should be used to inform your innovation strategy. This can include market trend analysis, customer feedback, and competitive actions to ensure your innovation efforts are fact-based and aligned with market needs as well as the overarching business strategy.

5. Foster an Innovation Culture

Promoting a culture that supports innovation at all levels of the organization, ensures that employees feel motivated and empowered to contribute their ideas, without the fear of failure. This will lead to accelerated innovation.

Linking Business with Innovation Goals

An example of an organization that has managed to align their innovation goals with their overall business strategy is CSS, a leading Swiss health insurance provider. 

CSS saw the need to address rising healthcare costs and enhance customer-focused digital transformation. The challenge was significant given the strict regulations and complex internal processes that are typical of the health insurance industry in Switzerland.

In 2019, CSS launched the KICKBOX program. The intrapreneurship program is geared at empowering bottom-up innovation by empowering employees across the organization to develop and validate their ideas. This ensures that innovation efforts are directly aligned with customer needs and business objectives.

Key Elements of CSS's Success:

• Employee Engagement: The program is open to every employee, encouraging everyone to participate and engage by contributing their ideas. New employees are introduced to KICKBOX when joining the company, and ongoing promotion and marketing efforts through various internal channels keeps the momentum alive.
• Structured Support: Innovators receive an initial starting credit, dedicated working hours they can use for their innovation projects, and access to a network of experts and resources. This structured support system helps employees validate their ideas and direct their focus to projects that align with the company’s strategic goals.
• Customer-Centric Innovation: By validating ideas with real customers early on in the process, CSS ensures that the innovation projects are relevant and valuable, and that any zombie projects are eliminated early on. This customer-focused approach has led to successful implementations, such as a voice assistant to help people navigate digital insurance services.

Since the introduction of the KICKBOX program at CSS, the organization has seen over 70 ideas reach the initial validation phase, with several progressing to market implementation. This has not only resulted in the fostering of a strong innovation culture within the organization, but has also contributed to the company’s strategic goals of improving the customer experience, while mitigating rising healthcare costs.

The stakes for corporate innovation are higher than ever. Organizations must move beyond the era of zombie projects by ensuring their innovation strategies are tightly aligned with their business strategies. By adopting best practices and encouraging a culture of innovation, companies can transform their innovation efforts into powerful drivers of growth and competitive advantage, both a on a local and on a global scale.